What luck! A new client from Asia has just placed a $250,000 order. It’s your first international order. But are you well prepared for this?
What happens if, for example, during shipping, the merchandise gets stopped at customs? It goes without saying that the client won’t pay until he’s received the goods…Result: your dream turns into a nightmare.
We’re not trying to discourage you; we’re just trying to show you the importance of properly planning an export project. Here are five steps to follow.
1. Give it some proper strategic thought
First, ask yourself if exporting is truly one of the best growth strategies for your business. If so, are you ready to devote the necessary time and resources? At what cost?
As applicable, this project must have the full support of management and be integrated into the company’s overall strategy.
2. Analyze all export aspects
Then, analyze whether the company’s main functions are able to realize this project, in particular:
- Human resources: Do you have enough employees and are they well trained? For example, you would like to export to Mexico, but do your representatives speak Spanish?
- Production: Are you able to respond to an increase in demand? Should you obtain larger facilities or purchase additional equipment? If applicable, how much will you have to invest?
- Marketing and distribution: Should you review your marketing tools? What distribution method will you use?
- Financial and legal resources: What is your short- and long-term financial capacity? How much will international development cost and what means of financing have you planned? Would you be able to protect your intellectual property abroad?
Completed with the help of external experts, this analysis will help identify the company’s weaknesses with regard to the general export risks and challenges, and develop an action plan in response. Above all, don’t dream of rapid returns: it could take years for an export project to become profitable.
3. Target and analyze your market
Don’t target all the markets. Choose the most attractive market for your business by conducting a study to understand the business dynamics of this market, your future clients’ profile, barriers for entry, etc. You will learn the rules of export at a lower risk.
Then, make sure you analyze the potential and characteristics of this market by going to visit as often as possible.
Are you considering the United States? Don’t forget that each state has its own requirements.
5. Analyze your financial needs
Lastly, thoroughly analyze the project costs related and examine financing possibilities. Pay particular attention to expenses that seem minor, such as travel. The bill will quickly add up if you travel several times to China!
There is a wide range of financing options through export loans and subsidies. We will be pleased to guide you and help you plan your international growth.